SOLAR SENSE,DELHI V. INCOME TAX OFFICER, WARD 44(1), DELHI

ITA 5207/DEL/2024

AI Insights

The case involves Solar Sense, the appellant, contesting an addition of Rs.21,87,505 to their income for the assessment year 2020-21, which was based on a discrepancy between the gross receipts reported in their Profit and Loss account and those shown in Form No. 26AS. The addition was made by the Assessing Officer due to the difference in reported figures, which the assessee explained was due to advance payments received and recognized in the subsequent financial year. The Tribunal agreed with the assessee's position that the income was reported in the year it was earned, despite TDS being deducted in the year of receipt, and thus, the addition constituted double taxation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298864 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: VISHAL AGARWAL
• Keywords: TDS

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.5207/िदʟी/2024 (िन.व. 2020-21) ITA No.5207/DEL/2024 (A.Y.2020-21) Solar Sense, Flat No.95-B, Gangotri Apartment, Block-F, Near Easy Day, Vikar Puri, Delhi 110018 PAN: ADSFS-1002-F ...... अपीलाथᱮ/Appellant बनाम Vs. Income Tax Officer, Ward-44(1), Civic Centre, Minto Road, Delhi 110002 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Vishal Agarwal, Advocate ŮितवादीȪारा/Respondent by : Shri Sanjay Kumar, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 13.01.2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 31.01.2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 24.07.2024,for assessment year 2020-21. 2. The appeal is time barred by 51 days. The assessee has filed an application supported by an affidavit citing reasons causing delay in filing of appeal. After perusal of the same, I am satisfied that delay in filing of appeal is not intentional, the delay has been caused for the reasons stated in petition which appears to be bonafide. Thus, delay of 51 days in filing of appeal is condoned and appeal is admitted for decision on merits. 2 ITA No. 5207/DEL/2024 (AY 2020-21) 3. Shri Vishal Agarwal, appearing on behalf of the assessee submits that solitary additions of Rs.21,87,505/- made in the assessment order is on account of mismatch of gross receipts as per Form no. 26AS and the receipts reflected in Profit and Loss account for Financial Year 2019-20. He submitted that during the period relevant to assessment year under appeal, the assessee in Profit and Loss account has recorded gross receipts to tune of Rs.70,01,185/-, whereas as per Form No. 26AS for relevant period the gross receipts are to the tune of Rs.91,88,690/-. The Assessing Officer (AO) added the difference of gross receipts reflected in Profit and Loss account and as shown in Form No. 26AS. He pointed that the advance payments received during Financial Year 2019-20 for which the services were rendered in subsequent Financial Year, invoices were raised and included in GST return in subsequent Financial Year i.e. FY 2020-21 have been added in impugned assessment year. Merely, for the reason that TDS has been deducted on advance payments would not mean that income has to be recognized in the year of deduction of TDS. The Assessing Officer has erred in making an addition of advance received despite the fact that the Revenue was recognized by assessee in the subsequent Financial Year and was offered to tax in the year of reorganization of Revenue. The assessee filed reconciliation of turnover explaining the reason for difference, yet, the AO and the CIT(A) made addition merely for the reason that TDS was deducted in the year of receipt of advance. The ld. Counsel submitted that since income has been offered to tax in the subsequent assessment year, the addition in impugned assessment year would result in double addition. 4. Per contra, Shri Sanjay Kumar representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submitted that the TDS deducted on alleged advance payment was 3 ITA No. 5207/DEL/2024 (AY 2020-21) claimed by the assessee in impugned assessment year. The CIT(A) directed the AO to allow TDS in the year in which income has been offered to tax or tax the income in the year in which TDS has been claimed. The assessee has claimed TDS in impugned assessment year but offered income to tax in next subsequent assessment year. The treatment given by the assesee cannot be accepted. 5. Both sides heard, orders of the authorities below examined. The AO had made addition of Rs.21,87,505/- on account of income not offered to tax though TDS on said amount was claimed by the assessee. As per the Profit and Loss account gross receipts of the assessee for Financial Year 2019-20 is Rs.70,01,185/- whereas as per Form No. 26AS for Financial Year 2019-20 the gross receipts are Rs.91,88,690/-. The contention of the assessee is that the difference in gross receipts as per Form No. 26AS and Profit and Loss account is on account of advance received by the assessee for which services were rendered in subsequent assessment year, invoices were raised and included in GST returns were recognized in subsequent Financial Year. Thus, advances were received in current year but were recognized as revenue in subsequent assessment year and were offered to tax in subsequent assessment year. This fact has not been disputed by the Revenue. The CIT(A) while deciding appeal of the assessee had directed the AO to allow TDS on advance received in the year in which income was offered to tax or tax the income in the year in which TDS has been claimed. It is also an undisputed fact that the assessee has claimed TDS on advances received in impugned assessment year and has recognized revenue in subsequent assessment year. I find that the transaction is revenue neutral, the receipts have been recognized in subsequent assessment year and has been offered to tax. Making addition in impugned assessment yearn would result in double addition, as the same income 4 ITA No. 5207/DEL/2024 (AY 2020-21) has been offered to tax in subsequent assessment year. Hence, addition made by the AO is directed to be deleted. 6. In the result, appeal of the assessee is allowed in the terms aforesaid. Order pronounced in the open court on Friday the 31st day of January, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 31.01.2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "